The courier, express, and postal industry is the largest segment of the transportation marketplace worldwide. This blog will provide a personal perspective on the challenges faced by firms in the industry as they serve an increasingly competitive market.

Monday, September 5, 2011

The list of witnesses included testifying to the Senate Homeland Security and Governmental Affairs Committee on Tuesday includes a witness that is not one of the "usual suspects." By including Thomas D. Levy, Senior Vice President and Chief Actuary, the Segal Company, the Committee signals that it believes that adjusting the retiree obligations will likely be part of legislation that the Committee proposes.

The Segal Company conducted the actuarial analysis of the Postal Service's pensions. Mr. Levy's testimony will likely cover the conclusions of that report. Given the primary focus of Segal Company, he may also be asked questions about actuarial issues relating to the Postal Service's retiree healthcare obligations.

Mr. Levy's appearance is designed to provide a legislative record to support the Senate Committee's legislative proposal. As he will likely testify that changes to retiree obligations is logical and in concordance with actuarial standards, this would suggest that the Committee will likely include legislative changes that follow actuarial standards.

The Senate Committee's choice of witnesses shows a contrast with the House Oversight and Government Reform Committee. The House Committee, in the last Congress had Jonathan Foley, Director of Planning and Policy Analysis, U.S. Office of Personnel Management testify in which he testified that OPM did not have the authority to change formulas used to calculate the Postal Service's obligations for retiree benefits. The report of the Inspector General of the Office of PersonnelManagement which came out in February 2011,was entered into the record at a hearing held in the current Congress. This report of the Inspector General of the Office of Personnel Management reinforces the impression that the primary concern of the House Committee is supporting the interests of the Office of Personnel Management over that of the Postal Service. With this position set, the Issa-Ross bill therefore uses increased Postal Service debt to ensure that the Office of Personnel Management's financial interests are not adjusted. [Italizized edits made 9/6/11 10:52 to clarify when OPM testified]

By the end of the hearing tomorrow, postal stakeholders should be clear that there will be two drastically different bills for solving the Postal Service's financial problems. With only a limited number of legislative days between now and October 1, 2011, a path to agreement appears difficult at best.

8 comments:

Anonymous
said...

We are supposed to trust our goverment to pass laws to help create jobs when they propose to layoff or terminate hundreds of thousands of goverment employees. If you can't keep your own employees working how are you going to help everyone else?

All politics, they don't care what's right for the American public! The USPS started as a Service and Gov't is trying to bury it, when Gov't is the problem. Time we clean out the USPS from the top and Gov't too while were at it.

It's such a shame that the government will try to privatize the Postal Service instead of releasing it's grasp on it. If the price of postage was raised to say .05 cents for all classes of mail, it would still be the cheapest and fastest mail service in the world. Also for that extra .05 cents it would provide working capital ( time) to move to a five day delivery and reduce the workforce in an orderly fashion. Instead the congress will attempt to privatize and end up selling off operations in the profitable large urban areas. Mail delivery will not be free anymore. You will pay for delivery to your mailbox at the end of your driveway, say $200. a year. Granted you won't be required to pay, only if you want delivery. If you live in the country there will be no mail delivery because it is not cost effective.So now to get mail delivery ( again not required) you will have to rent a delivery box much like a UPS store at say $200. A year and use your gas to drive to that box to get your mail. No sanctity of the mail anymore as anyone handling your mail will not have Postal Inspectors looking over their shoulders. Your postage will increase from .44 cents to a $1.44 because the entity running the Los Angelies urban delivery area will have to pay the New York or Dallas or Miami ect. urban delivery area a surcharge because they are not owned by the same company. It's a shame 500,000 jobs over a lousy Nickle, and the congress could pass the increase on their next vote.

110,000 management/'support'jobs (they need help to do their jobs) and 465,00 clerk/carrier jobs. The ONLY people in the universe that cannot see what's wrong here are management and the corporate mailer's executives and lobbyists (who all profit from gutting worker rights and benefits)

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Blog Author

Alan Robinson is the President of the Direct Communications Group and an associate of Analytic Business Services (AnaBus). He has over twenty years experience helping firms and government officials deal with the regulatory, policy, marketing, and management issues associated with changes in competition within transportation, parcel delivery and postal markets.
He can be reached at alan.robinson@directcomgroup.com